Saturday 11th January, 2025

The government has announced a concessionary loan scheme for small and medium-scale (SMS) rice millers and cooperative societies to purchase paddy during the current Maha season. The Treasury has set aside Rs. 10 bn for that purpose, we are told. Successive governments have provided such loans to SMS millers.

One may recall that in February 2024, the Treasury announced that the SMS millers and warehouse owners could obtain loans ranging from Rs. 25 million to Rs. 50 million each under a concessionary pledge loan scheme for paddy purchase during the 2023-2024 Maha season. It was reported that the loans would have to be repaid in six months, and Rs. 9 billion would be disbursed. But that loan scheme did not help make a dent on the problem of powerful millers dominating the paddy market. Such measures could therefore be considered soft punches thrown at heavyweights.

It is doubtful whether the loan amounts to be made available to the SMS millers and cooperative societies will be adequate vis-à-vis the financial prowess of the big-time millers they have to vie with against tremendous odds in purchasing paddy. Most of all, they do not receive funds in time for the commencement of harvesting. The state machinery and lending institutions are geared towards serving the interests of the wealthy millers, who also have politicians on a string.

Worse, large millers double as loan sharks in the rural sector. Many paddy farmers obtain loans from them before the commencement of cultivation seasons on the strict condition that they do not sell their paddy to anyone else. Thus, the Millers’ Mafia keeps the farmers in bondage to all intents and purposes and buys their paddy at unconscionably low prices. Some agricultural experts have pointed out that these millers also keep part of their paddy stocks with the farmers who are beholden to them, and hence it is difficult to trace the hoarded paddy.

Interestingly, the rich millers have taken on the heartless microfinance companies that provide loans to farmers at exorbitant interest rates, and employ draconian recovery methods. They accuse the latter of exploiting farmers! There is hardly any difference between the Millers’ Mafia and the ruthless microfinance companies, where the exploitation of the farming community is concerned. No government has made any serious effort to liberate the hapless farmers from the clutches of the unscrupulous millers and other Shylocks.

President Anura Kumara Dissanayake declared in his New Year message that his government had, inter alia, the goal of eliminating rural poverty high on its agenda. Economically empowering farmers will be half the battle in tackling rural poverty. This ambitious goal however will remain elusive as long as politicians and political parties benefit from the largesse of the big-time millers and baulk at doing what needs to be done to protect the farming community against exploitative practices.

Let the government be urged to make funds available to the SMS millers and cooperative societies expeditiously in sufficient amounts if it is genuinely desirous of making the paddy and rice markets really competitive to safeguard the interests of farmers and consumers. Usually, by the time the government reaches the starting block, the big-time millers are already halfway down the track, sprinting.

The provision of soft loans for paddy purchase is welcome, but much more needs to be done to prevent paddy/rice market manipulations and the exploitation of farmers and consumers. The need for a pro-people government capable of dealing with the exploiters in the garb of millers and wholesalers, with a firm hand, cannot be overstated.